Wisconsin courts do their best to thoroughly divide marital property during a divorce. There are many decisions to be in made in regards to what belongs to which party, especially between separate and martial property. How do the courts make these decisions?
In this article, we explain how Wisconsin Courts Divide Property in a Divorce, including:
- What is a Community Property State?
- What is Separate Property in a Divorce?
- What is Marital Property in a Divorce?
- How Property Gets Divided in a Wisconsin Divorce
- How to use Marital Property Agreements
- What is Marital Waste and what can be done about it?
How Do Wisconsin Courts Divide Property in a Divorce?
If spouses can agree on how they will split their property, they can often save time and avoid the court making property division decisions for them. If not, the general rule is that spouses keep all their separate property, and marital property is split evenly between the spouses. This default rule can be changed by marital property agreement or by the court’s discretion as discussed below.
What does it mean to be in a Community Property State?
There are two major categories your assets are divided into, Separate Property and Marital Property. In Community Property States like Wisconsin, each spouse keeps their Separate Property, and all the Marital Property is split evenly between the spouses.
What is Separate Property?
Separate Property is property that is acquired before the marriage and brought to the marriage as well as gifts or inheritance from third parties intended only for one spouse.
In order for separate property to remain separate property, it must be kept separate. For example, if separate property (cash) of one spouse is added to a joint account used by both spouses, or if one spouse does something to increase the value of the other spouses separate property, that separate property will be considered “co-mingled” and may be reclassified as marital property to be split evenly upon divorce.
What is Marital Property?
Marital Property is everything that you acquire during marriage, or separate property that has been co-mingled with other marital property. If it is unclear whether something is marital or separate property, the presumption is that it is marital property.
Even if property was purchased before the marriage, property titled in only one of the spouse’s names can still be classified as marital property if both spouses have contributed to the property, or in some cases if both spouses have benefited from the property.
According to Wisconsin Statute 767.61(2)(b), If it can be shown that refusing to divide one spouses separate property would create a hardship on the other spouse or on the children of the marriage, the court may divide separate property between the spouses.
How does our Property get Divided?
Property division in Wisconsin is governed by Wisconsin Statute 767.61. Generally speaking, each spouse keeps their separate property, and the marital property is split evenly between the spouses.
While the presumption is that the court will split marital property evenly, the court may decide to distribute property differently after considering factors laid out in Wisconsin Statute 767.61(3). These factors include but are not limited to: (a) the length of the marriage. (b) the property brought to the marriage by each party (c) Whether one of the parties has substantial assets not subject to division by the court. (d) The contribution of each party to the marriage, giving appropriate economic value to each party's contribution in homemaking and child care services. Etc. For example, if spouse A and B are married for only one or two years, Spouse A brought $1 million to the marriage and Spouse B brought $50k in debt, and there are no children of the marriage, the court may consider the brief marriage and the unequal assets and give a larger share of the marital property to Spouse A. The longer a marriage lasts, the less likely a court will be to make significant deviations from the presumed even split of marital property.
While there are many factors the court may consider for the distribution of marital property, it will NOT consider marital misconduct.
Marital Property Agreement
If a couple properly drafts and executes a marital property agreement (either before or after marriage) they can decide in the agreement how they want their assets to be divided. While there are some limitations, a marital property agreement can be used to bypass Wisconsin’s default rules, and allow spouses to decide which assets, property, or debt they want to classify individual/separate property, or marital property. These agreements give spouses more control over how their assets are divided both during and after a marriage.
What is Marital Waste and is there anything that can be done about it?
Marital waste is when one spouse overspends, destroys, gives away, transfers for inadequate consideration, or otherwise wastes marital property. When one spouse wastes marital assets in an effort to deprive the other spouse of the property in a divorce, the court has the discretion to make the wasteful spouse responsible for that loss by adding the value of the loss to their share of the marital assets. Under Wisconsin Statute 767.63, as long as the waste occurred within one year prior to the filing of the divorce, the wasted property is rebuttably presumed to be property subject to division.
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